DHS warns contractors about shutdown consequences

The Homeland Security Department is telling contractors to be prepared for contracts to be canceled or stopped if the government shuts down Tuesday.

Nick Nayak, the DHS chief procurement officer, wrote an open letter to industry Thursday detailing the department’s plans to stop some existing contracts, reduce others in scope and even terminate or partially end other acquisitions if Congress doesn’t pass a continuing resolution by Monday at 11:59 p.m.

“Should DHS determine that any of these actions is necessary, the contracting officer for each of the affected contracts will provide prompt, appropriate notice to the contractor in accordance with the terms and conditions of the affected contract,” Nayak wrote. “Notices will contain the direction necessary to comply.”

He said DHS will not notify vendors on contracts that are not affected by the lapse in appropriations.

“Unless a contractor is provided a formal notification to the contrary, all DHS contractors must continue to comply with all terms, conditions, requirements and deliveries specified in their contract(s),” Nayak wrote.

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Roger Waldron, the president of the Coalition for Government Procurement, said in an email that DHS’s letter is part of important communication that is necessary between government and industry.

“Contractors need to engage their contracting officers and customers to make sure they understand the customer funding profile and how it may or may not impact their contract performance,” Waldron said. “I anticipate similar notices coming from across government.”

The DHS notices come about a week after the Office of Management and Budget issued guidance to agencies reminding them of their responsibilities in the event of a shutdown.

OMB focused a lot of the frequently asked questions on acquisition. For instance, OMB Director Sylvia Burwell offered an example of the type of contract that can continue during a shutdown: “The situation where an agency has already obligated funds representing the entire price under a contract or task order before the funding lapse began, or where the agency may use multi-year or no-year funds to incur new obligations for the contract or grant.”

The Defense Department, the Environmental Protection Agency and other agencies have notified employees about a possible shutdown.

EPA deputy administrator Bob Perciasepe wrote to employees Sept. 19 and again Sept. 25 about how to prepare for a government shutdown.

Last week, he said the Office of Administration and Resource Management “is working with all offices and regions to update our contingency plan for executing an orderly shutdown of activities that would be affected by a lapse in appropriations. The uncertainty of the current circumstances puts our workforce in a difficult situation, and should a lapse occur, it could impose hardships on many employees as well as the people that we serve every day.”

The Sept. 25 note said EPA managers told employees Sept. 26 about the contingency plans for a shutdown and the employee’s status as essential or non-essential personnel.

“In consultation with our Office of General Counsel, we have worked to determine which of our activities may continue under these legal requirements,” Perciasepe wrote. “Similarly, we have worked to determine which employees would continue to report to work in the event of a lapse in funding, and which employees would be placed on furlough. Should a lapse occur, and depending on the length of the lapse period, these determinations may change over time as circumstances evolve. Importantly, the categorization of employees and whether or not someone is furloughed is not a reflection on the quality of their work, nor of their importance to our agency. It is merely a reflection of the legal requirements that we must operate under should a lapse occur.”

He said EPA would hand out official furlough notices on Oct. 1 if Congress doesn’t pass a spending bill.